Canadian dollar drops through 1.30
Wednesday 2 September, 2020
Daily Currency UpdateCAD - Canadian DollarThe US dollar continued its downward climb against the Canadian dollar, hitting another low yesterday when it broke through 1.30. USDCAD has since gained a few points, but it may be a rocky ride of new lows in the coming months.The Canadian dollar crept lower on the day amid short-term profit taking against the US dollar. The world’s base currency remained under pressure and markets found little incentive to reverse the recent trend. We anticipate the dollar will continue its downward trajectory as markets grapple with an extended period of ultra-loose monetary policy.
Key MoversThe Euro tested 1.20 Tuesday touching intraday highs at 1.2010 before shifting lower on US bear market demand. The Euro remains the primary benefactor of US dollar weakness, continuing its 2-month upturn to touch 28-month highs. Having failed to hold onto gains we expect ongoing resistance on moves approaching the key psychological handle.In the UK, Parliament returned, and many schools resumed after a six-month coronavirus shutdown. Almost all schools in England and Wales started again this week or next. Despite this and the ongoing gap between the UK and the EU over a future trade arrangement, Sterling remains well bid. GBPUSD touched 1.34 yesterday. The Australian dollar failed to extend gains beyond 0.74 US cents through trade on Tuesday amid profit taking and a USD bear market bounce. Having touched intraday day highs at 0.7410 the AUD drifted lower through the latter half of the domestic session and overnight as investors looked to square positions having marked a fresh 2-year peak. Investors largely ignored the RBA rate statement and policy announcement having priced in maintenance of the current policy platform. The RBA offered little beyond its recent commentary affirming its commitment to the current program, maintaining it is appropriate in the current environment if supported by ongoing fiscal stimulus.
- EUR/CAD: 1.546 - 1.560 ▲
- GBP/CAD: 1.737 - 1.751 ▲
- AUD/CAD: 0.955 - 0.964 ▲
- USD/CAD: 1.303 - 1.309 ▲